Selling, General and Administrative Expenses
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Six months ended June 30,
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Digester and Corporate
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HEBioT
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Total
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2021
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2020
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Change
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2021
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2020
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Change
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2021
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2020
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Change
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Selling, general and administrative expenses
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Staffing
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$
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1,339,297
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$
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1,467,140
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$
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(127,843)
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$
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178,766
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$
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80,216
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$
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98,550
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$
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1,518,063
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$
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1,547,356
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$
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(29,293)
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Stock based compensation
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245,072
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586,303
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(341,231)
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—
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—
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—
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245,072
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586,303
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(341,231)
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Professional fees
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482,254
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556,370
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(74,116)
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51,788
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102,687
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(50,899)
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534,042
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659,057
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(125,015)
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Office operations
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244,929
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230,495
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14,434
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342,673
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119,324
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223,349
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587,602
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349,819
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237,783
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Other expenses
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368,386
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443,520
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(75,134)
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405,189
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229,810
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175,379
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773,575
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673,330
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100,245
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Total Selling, general and administrative expenses
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$
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2,679,938
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$
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3,283,828
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$
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(603,890)
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$
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978,416
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$
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532,037
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$
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446,379
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$
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3,658,354
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$
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3,815,865
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$
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(157,511)
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Consolidated staffing and stock based compensation expenses of $1,763,135 during the first half of 2021 reflect the impact of staffing reductions initiated in 2020, offset in by increases in management across all lines and administrative staffing at the HEBioT facility, resulting in a decrease of $370,524 (17%) from the first half of 2020. Professional fees decreased by $125,015 primarily due to a reduction in investor relations fees. Office operations expenses increased by $237,783 as compared to the second quarter of 2020, driven primarily by a local property tax revaluation at the HEBioT facility. Other expenses increased by $100,245 as compared to the first half of 2020 due to an increase of $175,379 at the HEBioT facility primarily due to an adjustment of the West Virginia landfill assessment and an increase in bond trust fees.
Depreciation and Amortization
Consolidated depreciation and amortization of $1,002,931 during the six months ended June 30, 2021 decreased by $182,035 from $1,184,966 during the six months ended June 30, 2020 due to adjustments initiated in 2021 in the depreciation expense over the remaining lives of assets at the HEBioT faculty.
Other Expenses
Consolidated other expenses of $2,091,855 during the six months ended June 30, 2021 increased by $71,867 from $2,019,988 during the six months ended June 30, 2020 due absorption of a $32,749 loss from an unconsolidated investment and increases in the amortization of debt discounts and costs due to the increasing balance of the debt and a reduction in interest income in bond related trust funds due to lower interest rates.
Liquidity and Capital Resources
For the six months ended June 30, 2021, the Company had a consolidated net loss of $5,410,156, incurred a consolidated loss from operations of $3,318,301 and used net cash in consolidated operating activities of $4,260,305. At June 30, 2021, consolidated total stockholders’ equity amounted to $7,061,554, consolidated stockholders’ equity attributable to parent amounted to $5,730,816, and the Company had a consolidated working capital deficit of $9,109,474. While the Company had not met certain of its senior secured note’s financial covenants as of June 30, 2021 and has received a waiver for such non-compliance through June 30, 2021, until such time as the Company regains compliance or receives a waiver of such covenants for a year beyond the balance sheet date, under current GAAP accounting rules, the senior secured note amounting to $4,042,847 has been classified as current debt. The Company does not yet have a history of financial profitability. There is no assurance that the Company will continue to raise sufficient capital or debt to sustain operations or to pursue other strategic initiatives or that such financing will be on terms that are favorable to the Company. These factors raise substantial doubt about the Company’s ability to continue as a going concern.
Cash
As of June 30, 2021 and December 31, 2020, the Company had unrestricted cash balances of $2,279,060 and $2,403,859, respectively. In addition, as of June 30, 2021 and December 31, 2020, the Company had restricted cash balances of $6,412,191 and $4,492,636 relating to its West Virginia EDA senior secured bonds.
Borrowing and Debt
See Note 7. Notes, Bonds, Debts and Borrowings to the Financial Statements filed herewith.